Why Many Millionaires Choose to Rent, Not Buy

For many high-net-worth individuals, owning a home is not an appealing financial move right now.

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Home ownership is the classic American dream. Traditionally, owning a home has been a mark of success and financial security.

That dream is changing for many millionaires, with many affluent individuals opting out of high-priced homes for their primary residences and instead choosing luxury rentals.

Why would high-net-worth individuals rent? It’s all about price, investing, and lifestyle.

Living in Luxury, Waiting for Rates to Settle

According to Freddie Mac, in May 2025, the average 30-year mortgage interest rate is 6.76 percent. That’s down from May 2024’s 7.22 percent, but still higher than pre-pandemic rates.

A historical analysis of mortgage rates from Rocket Mortgage shows 2019 interest rates at 3.94 percent, dipping further in 2021 to 2.96 percent.

With higher interest rates come higher monthly payments. And luxury homes aren’t immune.

The monthly payment for new homes increased by 11 percent year over year in May. By way of contrast, an analysis from apartment listing marketplace Apartment List reports that the year-over-year rent increase in the same period is negative, at -0.3 percent.

Although many affluent individuals can afford higher home prices, they are choosing not to buy. Instead, they’re turning to luxury home rentals, which can provide premium lifestyle choices until interest rates stabilize.

Thinking About Wealth Differently

There’s a shift in how millionaires are looking at their wealth and how they will spend it. Instead of tying up large sums of money in a primary residence, many millionaires are choosing to diversify their portfolios by investing in real estate.

Buying property as an investment, rather than as a primary residence, has become a preferred method of capitalizing on the real estate market.

Many high-net-worth individuals consider home ownership a slower way to build wealth. Instead of buying a home to live in, they’re opting to diversify their portfolios by investing in commercial properties and purchasing multiple properties in different markets.

Investing in real estate tends to provide a stable cash flow and benefits from the appreciation of assets.

The stock market is another area in which former homeowners are investing their funds. It allows them to see a higher and faster return than they would if they owned a home and waited for its value to appreciate.

For example, the S&P 500 has delivered a mean annual return of 9.4 percent over the past 25 years. But in 2023, it delivered a 26.29 percent return, and in 2024, a 25.02 percent return. A primary residence generally would not have generated that kind of return.

Purchasing a home requires upfront costs. You must pay down payments and closing fees. You’ll also have maintenance costs and taxes. Taking those funds and investing them instead is a better option for many people.

Luxury Living, Low Maintenance

Luxury rentals are attractive to many affluent people because they offer more than just a place to live.

They provide a lifestyle that many wouldn’t have otherwise: fitness centers, concierge services, and resort-style amenities.

Renting provides the flexibility to relocate for career or leisure opportunities without having to sell a home. Data from the Federal Reserve Bank of St. Louis indicates that selling a home can take as long as 66 days on the market.

Add to that an extra 42 days to close, according to data from ICE mortgage technology.

Those numbers make a rental look much more attractive if you think you may relocate.

In addition, many affluent people travel or have more than one home. Another benefit of a rental such as a luxury condo is that the tenant doesn’t have to worry about home maintenance while they’re traveling.

Developers Respond

Developers have responded to the demand for luxury apartments with enthusiasm. With land at a premium in most cities, many developers are building luxury units where higher rent can be charged.

This may backfire, however. Even though many affluent individuals are moving toward renting, there is a limited number of these high-net-worth tenants.

According to the World Economic Forum, it’s a popular misconception that millionaires are a large group. In fact, less than 0.5 percent of Americans earn $1 million or more yearly.

Although the United States faces a housing shortage overall, developers have tried to capitalize on the luxury apartment trend, flooding the market with well-appointed apartments for what is actually a small group of people.

For example, according to a report from commercial real estate newsletter CRE Daily, in 2025, the United States has a housing shortage of 1.5 million to 7 million units. However, only 6,700 affordable units are under construction. Meanwhile, half a million luxury units are being built.

Mr. Blandings Rents His Dream House

For many affluent individuals, owning a home is not a financial move they want to make.

Instead, they’re shifting dollars to investments. The thinking is that investing wisely can bring in higher returns than waiting for a purchased home to appreciate.

There are other reasons as well: Some people want the luxury apartment experience that many of these units afford, while others are looking for the flexibility that only renting can provide.

The Epoch Times copyright © 2025. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.